John Krohn Selling Away Disputes

Investors Indicate That Principal Securities' John Krohn Was Selling Away

Soreide Law Group is reviewing possible investor claims of suitability, misrepresentation and other sales practice violations against securities broker John Michael Krohn (CRD#: 2722975, West Des Moines, Iowa). Notably, Krohn worked for Principal Securities from 1996 to 2017. His sales practices during that period have been called into question by at least five investors, and most of those investors brought disputes within the last couple years. Here’s more.

Principal Securities Client Indicates That John Krohn Engaged In Private Securities Transactions

Evidently, a client of Principal Securities brought a lawsuit about John Krohn in March 2020. Specifically, Krohn’s clients indicated that Principal Securities did not supervise him. Notably, the client particularly referenced misconduct associated with Krohn’s private securities transactions or what is known as selling away. For this reason, the client demanded $10,000,000 in compensatory damages plus interest in this ongoing matter.

Krohn Was Selling Away From Principal Securities, Client Indicates

The second most recent dispute on John Krohn’s record comes from a Principal Securities client in February 2020. Particularly, in this FINRA Arbitration Claim, the client suggested that the broker was not only selling away but was also doing outside business with the client. It seems that Krohn’s interactions with the client did not go through Principal Securities. Supposedly, the client lost money on promissory notes. Because of this, the client demanded $1,200,000 in damages. As of December 11, 2020, this matter is ongoing.

Principal Securities Client Indicates That John Krohn Solicited Investments in Venture Capital Companies

Moreover, a Principal Securities client claims that John Krohn solicited investments in venture companies. The claim, which clients filed in February 2019, alleges that Krohn caused the clients to purchase investments in his companies. It seems that the broker managed or controlled those companies. Notably, the clients allege $28,000,000 in damages for losses on investments that Krohn purportedly solicited. This matter is awaiting a resolution.

FINRA Suspends Krohn For Outside Business Activities While Employed By Principal Securities

FINRA issued John Krohn a three-month suspension and $10,000 fine as securities broker in 2018 for violating rules on outside business activities and private securities transactions. The regulator accused Krohn of running four companies as officer and director. One was for investing in new or underperforming and high-risk businesses. It seems that the broker kept his relationships with a client private which prevented Principal from determining whether Krohn’s outside business ventures interfered with their initiatives.
Also, FINRA says that Krohn invested nearly $8,000,000 in up to ten companies through transactions which were outside the scope of his employment. Krohn did not tell Principal Securities about his actions. For this reason, FINRA temporarily disallowed him from being a securities broker.

Losses From Principal Securities Broker John Krohn?

John Krohn denies all allegations of his sales practice violations from the above mentioned customers. Have you experienced losses by investing with him? If so, reach out to Soreide Law Group at (888) 760-6552 and speak with experienced counsel concerning a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have incurred losses due to misconduct of securities firms and financial advisors.